Theresa May's election gamble backfires as voters throw a surprise

Page said Corbyn, a lifelong left-wing activist who has spent decades speaking to crowds, was underestimated as a campaigner.

Although the conservatives will remain the most dominant party in Parliament, the British system of government requires a majority for a party to claim the prime minister spot.

Mrs May says she will form a government with the Democratic Unionist Party from Northern Ireland, which won 10 seats. The skewed media coverage had suggested that the Brexit vote had left the Labour Party in disarray as Corbyn fought of numerous challenges within his party to remove him as their leader.

May, however, insisted her party was still in pole position to lead, despite falling short by eight seats, CNN reports.

With results declared for almost all of the 650 seats, Conservatives won 318 while the opposition Labour secured 262, leaving neither party anywhere close to the 326 seats required for an overall majority.

"I assume that Britain, from what I heard from the Prime Minister today, wants to stick to its negotiating plan", Merkel told a news conference alongside President Enrique Pena Nieto. The iPath GBP/USD Exchange Rate ETN (NYSEARCA:GBB) will also be in focus in the near term (read: Is the Bearish Run Over for British Pound ETFs?).

"May won't be able to make any compromises because she lacks a broad parliamentary majority", he said.

Ms May said she called the crucial general election in order to strengthen her hand in the Brexit negotiations but her party lost seats and failed to reach a majority. The Labour Party, under the leadership of Jeremy Corbyn, meanwhile gained at least 29 seats, shattering the Conservatives' hope of gaining a clear validation of their Brexit strategy.

That means it will support a Conservative minority government on key votes in parliament without a formal coalition deal.

"The last thing business leaders need is a parliament in paralysis, and the consequences for British businesses and for the United Kingdom as an investment destination would be severe", said Stephen Martin, director general of the Institute of Directors business lobby.

But Elmar Brok, a German conservative and the European Parliament's top Brexit expert, told the Ruhr Nachrichten newspaper that the talks would now be more complicated.

"Imagine she survives until autumn of next year", he said. That's what people voted for last June.

Damian Green, a lawmaker in the pro-EU wing of the party, was promoted to first secretary of state - effectively deputy prime minister. It said Britain was "effectively leaderless" and the country "all but ungovernable".

"Politics has changed and this is people saying they have had quite enough". "The task of restoring orderly government in order to make sense of Brexit is now a national emergency, and it falls to them".